GenTek's Second-Quarter Revenues Soar 50% on Strength of Telecom Segment
7 August 2000
Income From Continuing Operations Up 105%
HAMPTON, N.H. - GenTek Inc. today announced its quarterly results, including
a second-quarter revenue increase of 50% to $326.5 million in the three months
ended June 30, 2000, compared with $217.7 million in the corresponding period of
last year. For the latest period, income from continuing operations increased
105% to $18.0 million, or 70 cents per diluted share, compared with $8.8 million,
or 41 cents per diluted share, in the second quarter of 1999, a 71% gain in
earnings per diluted share.
Prior-year second-quarter results included a $6.2 million non-recurring
charge ($3.7 million after tax) related primarily to the spinoff of GenTek
from its predecessor company. Excluding this one-time item, prior-year second-
quarter income from continuing operations was $12.5 million, or 58 cents per
diluted share. After adjusting for this item, income from continuing
operations for the latest period increased 44%.
"Our telecommunications equipment segment, led by Krone, was a
particularly strong performer as the market's desire for increased bandwidth
continues to accelerate, leading to record customer activity and new business
around the globe," said Paul M. Montrone, chairman of GenTek. "During the
second quarter, we announced two significant investments that broaden our
telecommunications product offering and strengthen our capabilities to provide
value-added solutions to our growing telecom service customer base. First, the
acquisition of an 81% interest in Con-X Corporation significantly enhances
GenTek's position as a full-suite provider of local-loop management systems.
Second, the pending acquisition of the Digital Communications Group of
Prestolite Wire Corporation will enable GenTek to provide customers around the
globe with complete connectivity and wiring solutions that maximize network
bandwidth and speed."
On June 1, 2000, GenTek announced that it had acquired an 81% controlling
interest in Con-X Corporation, an emerging leader in the development of
automated cross-connect and loop management systems for DSL and other
broadband service providers. This acquisition will be accounted for as a
purchase and, subject to the receipt of a definitive appraisal, the company
may account for some portion of the purchase consideration as acquired in-
process research in the quarter ending September 30, 2000.
The Digital Communications Group of Prestolite Wire Corporation is a
leading manufacturer of copper and fiber-optic cable for voice and data
transmission. Its product line includes TrueNET(TM), the first cabling
solution to prevent bit errors caused by the structured cabling system.
For the first six months of 2000, GenTek sales increased 86% to $642.1
million from $345.5 million in the corresponding period of last year. Income
from continuing operations rose 38% to $28.7 million, or $1.17 per diluted
share, compared with $20.8 million, or 97 cents per diluted share, in the
first six months of 1999. The prior-period results exclude the one-time item
described above, as well as an extraordinary loss from early extinguishment of
debt of $4.9 million, or 23 cents per diluted share.
Earnings from continuing operations before interest, taxes, depreciation
and amortization (EBITDA), excluding non-recurring charges, rose 54% to $62.1
million and 73% to $114.5 million for the second quarter and first six months
of this year, respectively, compared with $40.4 million and $66.1 million in
the corresponding 1999 periods.
GenTek Inc. is a technology-driven manufacturer of telecommunications
equipment and other products.
GENTEK INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1999 2000 1999 2000
Sales $217.7 $326.5 $345.5 $642.1
Cost of Sales 165.1 232.2 258.2 460.2
Selling, general and
administrative expenses 29.2 49.3 45.8 100.1
Operating profit 23.4 45.0 41.5 81.8
Interest expense, net 7.7 16.5 11.7 33.2
Other (income) expense,
net (0.1) (2.5) (0.2) (2.7)
Income from continuing
operations before
income taxes and
extraordinary item 15.8 31.0 30.0 51.3
Income tax expense 7.0 13.0 13.0 22.6
Income from continuing
operations before
extraordinary item 8.8 18.0 17.0 28.7
Income from discontinued
operations (net of tax) (0.2) - 1.0 -
Income before
extraordinary item 8.6 18.0 18.0 28.7
Extraordinary item -
loss from debt
extinguishments
(net of tax) 4.9 - 4.9 -
Net Income $3.7 18.0 $13.1 $28.7
Weighted average
common shares 20.9 25.1 20.9 23.9
Weighted average common
and equivalent shares 21.5 25.7 21.5 24.6
Earnings per share
from continuing operations
- Basic $0.42 $0.72 $0.81 $1.20
- Diluted $0.41 0.70 $0.79 $1.17
Earnings per share
- Basic $0.17 $0.72 $0.62 $1.20
- Diluted $0.17 $0.70 $0.61 $1.17